Tax season is already upon us, and it’s easily one of the most stressful times of the year. If you already owe back taxes for previous unpaid years, it can even be more anxiety-inducing. You may have heard about tax debt relief through the television or radio, but what is it?
What is tax debt relief?
Americans owe taxes when they didn’t pay enough to the Internal Revenue Service throughout the year to cover state and federal taxes. It can come as a surprise, and some people choose not to pay in the hopes that they can pay it off later. This isn’t the case. When you refuse to pay your taxes, interest and penalties can increase the amount you owe. Before long, you could owe a much larger amount, and the IRS may sue you for the money.
Tax debt relief is the phrase that businesses and organizations use to offer assistance with your taxes when you owe money to the IRS. Sometimes these tax debt relief companies can decrease what you owe while other times they can make your payments possible based on your income.
What do tax debt relief companies do?
As mentioned before, tax debt relief companies assist you with your taxes when you owe business, personal, property, state, or federal taxes. Sometimes they offer tax relief programs to eliminate your back tax collection or decrease what you owe. The truth is that most people won’t qualify for these programs for various reasons. Tax debt relief companies cannot force the IRS to do anything.
These IRS tax relief programs usually request a large sum of money up front to assist someone. If the business cannot help, they don’t issue a refund. While this isn’t always the case, many fraudsters have taken advantage of the system to con Americans out of their money.
Are tax debt relief companies reliable?
Yes, there are some reliable tax relief companies you can contact if there is an issue with your taxes. Sometimes legal issues may require you to contact an attorney to resolve the issue. Other times, tax debt relief programs may counsel you to prevent debt in the future. However, if you simply owe back taxes from failing to pay, most IRS tax relief companies can’t help you.
Thankfully, there are other options available. As long as there aren’t legal issues, you can contact the IRS. The Internal Revenue Service has many outlets for individuals that are having a difficult time paying their debt. Sometimes, you can decrease the amount you owe through an Offer in Compromise.
Another option is to complete an Installment Agreement Request, which asks the IRS to allow you to make payments over a period of time to pay off your back taxes. Finally, you can always apply for an extension if your taxes are too high for you to pay currently, but you can pay them in full later.
